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The Indian ad industry to grow with a compound annual growth rate of 11% till 2020, says report

The Indian ad industry to grow with a CAGR of 11% till 2020, says report

The Indian ad Industry is expected to grow with a compound annual growth rate (CAGR) of 11% till 2020, according to a collaborative report by Dentsu Aegis Network and Exchange4Media group (DAN-E4M).

The ad industry is bolstered by video ad spends which accounted for 19% of the overall spend in digital advertising and is further expected to grow by 38% till 2020.

It is also boosted by the rollout of 4G, reducing data costs, increasing smart phone penetration and increasing time spent on mobile phone, the digital advertising industry which currently stands at INR 8,202 crores, is expected to grow with a CAGR of 32% to reach INR 18,986 crores by 2020.

The report further stated that TV continues to be the largest share of media spends at 40% (INR 22,526 crores) followed by print at 34% (INR 18,981 crores). Digital media contributes 15% (INR 8,202 crores) of the overall ad spends.

Meanwhile, FMCG spent the highest on advertisements contributing 29% to the industry. This is followed by the automotive and ecommerce sectors.

Ashish Bhasin, chairman and chief executive of South Asia said: "Digital is no longer a medium - it’s a way of doing business. It is how consumers interact with brands. The digital transformation is affecting every business and agencies and marketers who don’t recognise this will be left behind. Digital is a behavioral change taking place with the consumers, not just a way of building a brand. This is a critical difference many don’t understand."

Nawal Ahuja, co-founder and director of Exchange4Media Group said: "Digital ad spends will touch almost 19,000 crores in 3 years, almost same as the size of print ad industry today. It is expected to grow at 3X of industry average over this time to touch almost a quarter of ad spends. Of this, mobile is expected to take 60% of share."

"It is true that two companies, Google and Facebook continue to take the majority share of these spends, by some estimates, 80-85%. But this year might change that, given these factors in play - AR/VR, an increase in visual storytelling through images, gifs, videos, etc. and Amazon and other entities, especially the likes of Alibaba, Tencent."